Transport Canada has many ways of encouraging vessel owners and operators to comply with marine safety and environmental laws and regulations. To deal with non-compliance with the Canada Shipping Act, 2001 and its regulations effectively and consistently, Transport Canada uses a scaled approach to enforcement, including verbal warnings, assurances of compliance, written warnings, administrative monetary penalties, and penal prosecution. Administrative monetary penalties can be issued by Transport Canada’s Marine Safety Inspectors and include a review and appeal procedure at the Transportation Appeal Tribunal of Canada.
In December 2018, the Canada Shipping Act, 2001 was amended to raise the maximum administrative monetary penalty from $25,000 to $250,000 per violation. The purpose of this higher maximum penalty is to encourage vessel owners and operators to comply with Canada’s marine safety and environmental laws. This approach was supported by marine industry stakeholders.
In order for Transport Canada to apply these higher penalties, it will be amending the Administrative Monetary Penalties and Notices (CSA 2001) Regulations.
This discussion paper outlines a proposed framework to determine and apply the updated penalties. The penalty issued would be calculated based on:
- the gravity of the violation
- whether the violator is an individual, corporation, or vessel
- the size of the vessel, and
- other relevant information related to the violation.
With the proposed framework, the updated penalty ranges would be:
| How serious is the violation? | Fine for individual violator | Fine for vessel or corporate violator |
|---|---|---|
| Minor | $260 to $1,250 | $525 to $10,000 |
| Medium | $1,300 to $6,250 | $2,625 to $100,000 |
| Serious | $2,625 to $12,500 | $5,250 to $250,000 |
To support these proposed changes, Transport Canada wants feedback from stakeholders that are regulated under the Canada Shipping Act, 2001 and its regulations. Transport Canada is especially interested in feedback on the framework and updated penalty ranges. Please email your feedback to: AdminMonetaryPenalties-SanctionsAdminPecuniaires@tc.gc.ca.
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Purpose
The purpose of this discussion paper is to outline a proposed framework for applying administrative monetary penalties (AMPs) up to the allowable maximum penalty amount of $250,000 per violation.
Transport Canada (TC) will use this framework to support future amendments to the Administrative Monetary Penalties and Notices (CSA 2001) Regulations (AMP Regulations) to update penalty ranges for violations under the Canada Shipping Act, 2001 (CSA 2001 or the Act) and its regulations. Currently, the penalty ranges under the AMPs Regulations reflect the previous allowable maximum penalty amount of $25,000. The proposed amendments will allow TC to issue AMPs up to the $250,000 maximum.
Amendments to the AMP Regulations are targeted for 2023, which would update the penalty range for violations of the CSA 2001 itself and the following regulations:
- Ballast Water Regulations;
- Environmental Response Regulations;
- Load Line Regulations;
- Special-purpose Vessels Regulations;
- Vessel Safety Certificates Regulations; and
- Vessel Registration and Tonnage Regulations.
The proposed amendments would also enable the use of AMPs and prescribe penalty ranges for violations of the:
Background
Existing enforcement and compliance regime under the CSA 2001
The Canada Shipping Act, 2001 is one of the main laws related to the safety of marine transportation and recreational boating in Canada’s waters, as well as the protection of the marine environment from the impacts of vessel activities. The Act is broad, applying to all vessels that operate in Canadian waters, including Canadian and foreign-flagged vessels, and vessels of all sizes ranging from pleasure craft, fishing vessels, and passenger vessels, to oil tankers, cargo ships, and cruise ships.
Transport Canada has a strong compliance and enforcement regime to encourage compliance by vessel owners and operators with the CSA 2001 and its regulations. A key goal of this regime is to promote compliance in an effective, consistent, and transparent manner. Transport Canada communicates regulatory requirements to individuals and businesses and identifies when there has been non-compliance through monitoring and inspections.
When there has been non-compliance, TC will take enforcement action to bring individuals and businesses back into compliance with marine safety and environmental protection requirements. Transport Canada escalates its enforcement actions as appropriate, depending on the context and the severity of the violation.
Transport Canada enforcement tools
- warning letters or verbal counselling;
- assurances of compliance (i.e., formal opportunities for a person or vessel to correct a violation, subject to an AMP if the issue is not fully corrected);
- vessel detention;
- the suspension or cancellation of Canadian Maritime Documents (e.g., licences, permits, certificates);
- AMPs; and
- summary conviction (e.g., fines and/or imprisonment).
One enforcement tool that is currently available under the CSA 2001 is AMPs. An AMP is aimed at promoting compliance and is not intended to punish the violator. It acts as a financial disincentive to non-compliance and does not involve the court system for its issuance. An individual or company that has received an AMP may request a hearing at the Transportation Appeal Tribunal of Canada —an independent body from TC— that can review the charge and the penalty amount.
As per the CSA 2001, a range of penalties is established through regulation rather than a fixed penalty. This helps to ensure that penalties are appropriate and fair depending on the violator and the circumstances of the violation. Departmental guidance material outlines the process for determining an appropriate, specific penalty amount within the range of penalties.
The Administrative Monetary Penalties and Notices (CSA 2001) Regulations are about the administration of AMPs under the CSA 2001. These regulations identify violations of the CSA 2001 and its regulations and assigns a range of penalties that may be applied. The penalty range for a violation may not exceed the maximum penalty amount allowable by the CSA 2001, which is $250,000, or the maximum fine applicable for a summary conviction, whichever is lower.
For further background on how TC determines an appropriate enforcement response, please see Transport Canada’s Enforcement Policy and the policy on the Enforcement of the Canada Shipping Act, 2001 and the Arctic Waters Pollution Prevention Act. For clarity, this discussion paper is proposing changes only to how TC determines an appropriate AMP for a violation of the CSA 2001 and its regulations, and to update penalty ranges for violations under the AMP Regulations; it is not proposing any other changes to TC’s enforcement approach.
Proposed updated AMPs framework
This section outlines the proposed updated framework for determining an AMP and would be used to support amendments to the AMP Regulations to update the penalty ranges for violations.
Subsection 3.1 outlines how TC may determine an appropriate penalty, within the range of penalties, when a violation has been committed. This includes a description of the gravity of violations, classes of violators, and how the size of a vessel and aggravating and mitigating factors may influence a penalty amount. These elements will be captured under departmental policy and guidance.
Subsection 3.2 outlines the different penalty ranges that will be assigned within the AMP Regulations to a violation of the CSA 2001 and its regulations, based on the proposed framework.
Determining the amount of an AMP
When a violation has been committed and an AMP has been identified as the appropriate enforcement response, TC must determine an appropriate, specific penalty amount to issue.
Transport Canada is proposing that a penalty amount may be based on a consideration of the gravity of the violation; the class of violator and, if applicable, the size of the vessel; and any aggravating or mitigating factors that may increase or decrease the penalty amount.
Gravity of violation
Determining an appropriate penalty first requires an assessment of the gravity of a violation. The gravity of a violation is based on the nature of the regulatory requirement, and the potential consequences of non-compliance. In keeping with the existing approach to applying penalties, a violation’s gravity level is assessed as being minor, medium, or serious. The greater the gravity of a violation, the greater the penalty amount that may be applied.
| Gravity of violation | Criteria |
|---|---|
| Minor | Violations that are typically administrative in nature, which would not have resulted in a risk of harm to people or the environment (e.g., record-keeping, information management, and reporting requirements; vessel registration, markings, naming). |
| Medium |
Failure to comply with regulatory requirements relating to, for example:
Violations relating to marine personnel that will not create a risk of harm to people or the environment (e.g., employment, wages, leave, etc.). |
| Serious |
Violations that could create a risk of harm to people or the environment such as to, for example, the safety of vessels and persons, environmental protection, and pollution prevention. Violations related to fraud, the destruction of documents, or an obstruction of authority. |
Classes of violators
Under the CSA 2001, marine safety and environmental protection regulations may apply with respect to an individual (e.g., master of the vessel, crew members, passengers), a corporation (such as, a business), or a vessel, depending on the nature of a regulatory requirement. Typically, corporations and vessels will be subject to higher penalties than individuals for the same or similar violations to ensure AMPs are effective in deterring non-compliant behaviour.
Transport Canada will consider six classes of violators when calculating an appropriate penalty amount to apply:
| Classes of violators | |
|---|---|
| 1 | Individual |
| 2 | Vessel less than 12m in length or a corporation that owns or operates such as vessel |
| 3 | Vessel 12m to less than 24m in length or a corporation that owns or operates such as vessel |
| 4 | Vessel 24m to less than 50m in length or a corporation that owns or operates such as vessel |
| 5 | Vessel 50m to less than 100m in length or a corporation that owns or operates such as vessel |
| 6 | Vessel 100m or greater in length or a corporation that owns or operates such as vessel |
Vessel size will be used as a guideline when an AMP is to be issued to a corporation or vessel to determine an appropriate penalty amount where the greater the size of the vessel, the greater the penalty amount that may be applied. This is to ensure that the penalty is greater than the potential financial benefits of non-compliance and reflects the actual or potential consequences of a violation. Generally, as the size of a vessel increases the severity of actual or potential consequences of a violation increases as well.
Determining factors
Determining factors are circumstances that may either increase or decrease the amount of the penalty issued to a violator relative to the applicable baseline penalty amount. These aggravating and mitigating factors are elements that Transport Canada considers when taking enforcement action as per its Departmental Enforcement Standards.
Transport Canada may consider at least three aggravating factors and three mitigating factors when determining an appropriate AMP amount.
Aggravating factors may increase the penalty amount above the baseline amount up to the maximum penalty that is applicable to the gravity of violation and class of violator. Transport Canada would assess the following factors:
| Aggravating factors | |
|---|---|
| History of non-compliance | Whether the violator failed to comply with the same or a similar requirement under the CSA 2001 within the past five years, the number and severity of past violations |
| Actual or potential harm | Whether the violation resulted in actual or potential harm to any persons or to the environment |
| Economic benefit | Whether the violator gain any economic or financial benefit from committing the violation |
For example, with respect to the history of non-compliance, the more instances of past non-compliance that an individual or business has, the greater the penalty amount that TC would apply. If a violator has no history of non-compliance, there would be no additional amount added to the baseline penalty amount.
Similarly, the greater the harm that was or could have been inflicted on a person (such as a crew member or passenger) or the environment, the greater the penalty amount that would be applied. For example, a violation that results in a permanent injury or death would result in a larger penalty amount that if there was a short-term or minor injury.
With respect to the economic benefit factor, a greater penalty amount would be applied for a violation that provides the violator an economic or financial benefit as compared to a violation that results in no economic or financial benefits.
Transport Canada will also consider at least three mitigating factors:
| Mitigating factors | |
|---|---|
| Mitigation of harm | Whether the violator took reasonable steps to come into compliance on their own initiative or to prevent, limit, or eliminate the violation’s consequences. |
| Cooperation with TC | Whether the violator provided reasonable assistance to authorities and/or cooperated with directions. |
| Self-reporting | Whether the violator brought the violation to the attention of TC and before it was made aware by other means. |
If applicable, mitigating factors may reduce the final penalty by up to 30 per cent after considering all applicable aggravating factors: 7.5 per cent for each of the mitigation of harm and cooperation with TC factors, and by 15 per cent for the self-reporting factor. Transport Canada is proposing that the self-reporting factor be assigned more weight to act as an incentive to self-report any violations and work with TC to ensure compliance.
In special circumstances, Transport Canada may also convene an enforcement advisory board, to consider the application of aggravating and mitigating factors. The board may recommend a penalty that vary by more than 30%, but not below the minimum, or above the maximum determined by regulation for the offence.
Further details regarding the assessment of aggravating and mitigating factors are found in Annex A.
Methodology for calculating an AMP
To calculate an appropriate, specific penalty using the AMP Calculation Matrix, Transport Canada will employ the following formula that considers all the elements of the updated AMPs framework:
AMP AMOUNT = Baseline Penalty (A) + History of Non-Compliance Factor (B) + Actual or Potential Harm Factor (C) + Economic Benefit Factor (D) - Applicable Mitigating Factors (E)
Annex B (AMP Calculation Matrix) provides additional information on the calculation of specific penalty amounts being proposed, including baseline penalty amounts, based on the gravity of the violation, the category of violator, and the presence of any aggravating or mitigating factors.
The below table outlines the proposed minimum and maximum penalty amounts for each class of violator and gravity of violation:
| Class of violator | Gravity of violation | Minimum penalty | Maximum penalty |
|---|---|---|---|
| Individual | Minor | $260 | $1,250 |
| Medium | $1,300 | $6,250 | |
| Serious | $2,625 | $12,500 | |
| Vessel less than 12m in length or a corporation that owns or operates such as vessel | Minor | $525 | $2,500 |
| Medium | $2,625 | $12,500 | |
| Serious | $5,250 | $25,000 | |
| Vessel 12m to less than 24m in length or a corporation that owns or operates such as vessel | Minor | $1,050 | $5,000 |
| Medium | $5,250 | $25,000 | |
| Serious | $10,500 | $50,000 | |
| Vessel 24m to less than 50m in length or a corporation that owns or operates such as vessel | Minor | $2,100 | $10,000 |
| Medium | $10,500 | $50,000 | |
| Serious | $21,000 | $100,000 | |
| Vessel 50m to less than 100m in length or a corporation that owns or operates such as vessel | Minor | $2,100 | $10,000 |
| Medium | $15,750 | $75,000 | |
| Serious | $31,500 | $150,000 | |
| Vessel 100m or greater in length or a corporation that owns or operates such as vessel | Minor | $2,100 | $10,000 |
| Medium | $21,000 | $100,000 | |
| Serious | $52,500 | $250,000 |
3.2 Determining a penalty range for a violation
Penalty ranges
In accordance with the framework for applying AMPs set out in section 3.1 of this document, the following are the proposed penalty ranges that may be prescribed for a violation under the Administrative Monetary Penalties and Notices (CSA 2001) Regulations. The ranges are broad to capture the penalty amounts that may apply to all six classes of violators captured under the AMPs Calculation Matrix:
| Gravity of violation | Category of violator(s) | |
|---|---|---|
| Individual | Vessel or Corporation | |
| Minor | $260 - $1,250 | $525 - $10,000 |
| Medium | $1,300 - $6,250 | $2,625 - $100,000 |
| Serious | $2,625 - $12,500 | $5,250 - $250,000 |
Seeking Your Views:
- What are your views on the proposed framework, and do you see any potential impacts for your organization or sector?
- Are there any additional aggravating or mitigating factors that should be considered when determining an appropriate AMP amount to apply for a violation?
Next Steps
As TC moves forward, it will consider the comments received and use them to support the development of proposed amendments to the AMP Regulations.
Transport Canada is targeting these amendments to the AMP Regulations for pre-publication and public comment in Canada Gazette, Part I, in 2023. Transport Canada will continue to consult and engage with Canadians on this proposed framework and amendments at future Canadian Marine Advisory Councils. Further amendments to the AMP Regulations may be proposed in the future to update the penalties for other regulations, as part of Transport Canada’s ongoing work to modernize its enforcement regime.
You may send your comments on this discussion paper to: AdminMonetaryPenalties-SanctionsAdminPecuniaires@tc.gc.ca
Annexes
| Aggravating factors |
Scale of severity |
||||
|---|---|---|---|---|---|
| None | Low | Moderate | High | Assessed Score | |
| History of non-compliance (B) | No history of non-compliance within the past five years for the same or similar violation. | One instance of non-compliance within the past five years for the same or similar violation |
Two instances of non-compliance within the past five years for the same or similar violation |
Three or more instances of non-compliance within the past five years for the same or similar violation | None, Low, Moderate, or High |
| Actual or potential harm (C) |
No injury or minor injury to any person requiring first aid treatment OR No adverse effects on the environment |
Short-term, non-incapacitating injury to a person (temporary impact on ability to perform job or quality of life) OR Small-scale pollution incident (for oil, a spill of less than 10 litres) |
Serious, non-incapacitating injury to any person OR Medium-scale pollution incident (for oil, a spill of 10 litres to less than 50 litres) OR Adverse effect(s) on biodiversity ecosystem or habitat, including alteration, disruption, or degradation. OR Death, harm, or harassment of wildlife species OR Both criteria under the “low” column |
Incapacitating, disabling, or permanent injury to any person, or death OR Large-scale pollution incident (for oil, a spill of 50 litres or greater) OR Two or more criteria under the “moderate” column |
None, Low, Moderate, or High |
| Economic benefit (D) | No economic benefit | N/A | N/A | Any economic benefit | None or High |
| Category of Violator | Gravity of the Violation | Maximum Penalty | Baseline Penalty (A) |
History of Non-Compliance (B) |
Actual or Potential Harm (C) |
Economic Benefit (D) |
Mitigating Factors (Up to 30% of penalty) (E) |
Range of Penalties |
|---|---|---|---|---|---|---|---|---|
|
Individual (Person) Range: $260 - $12,500 |
Minor | $1,250 | $375 | Low: $109 | Low: $55 | Low: N/A | Self-report: -15% | $260 - $1,250 |
| Moderate: $219 | Moderate:$109 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $438 | High: $218 | High: $218 | Action to mitigate: -7.5% | |||||
| Medium | $6,250 | $1,875 | Low: $547 | Low: $273 | Low: N/A | Self-report: -15% | $1,300 - $6,250 | |
| Moderate: $1,094 | Moderate: $547 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $2,188 | High: $1,093 | High: $1,093 | Action to mitigate: -7.5% | |||||
| Serious | $12,500 | $3,750 | Low: $1,094 | Low: $547 | Lo:w N/A | Self-report: -15% | $2,625 - $12,500 | |
| Moderate: $2,188 | Moderate: $1,094 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $4,375 | High: $2,187 | High: $2,187 | Action to mitigate: -7.5% | |||||
|
A vessel that is less than 12 metres in length or A person other than an individual that owns or operates a vessel that is less than 12 metres in length Range: $525 - $25000 |
Minor | $2,500 | $750 | Low: $219 | Low: $109 | Low: N/A | Self-report: -15% | $525 - $2,500 |
| Moderate: $438 | Moderate: $219 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $875 | High: $437 | High: $437 | Action to mitigate: -7.5% | |||||
| Medium | $12,500 | $3,750 | Low: $1,094 | Low: $547 | Low: N/A | Self-report: -15% | $2,625 - $12,500 | |
| Moderate: $2,188 | Moderate: $1,094 |
Moderate: N/A |
Cooperate: -7.5% | |||||
| High: $4,375 | High: $2,187 | High: $2,187 | Action to mitigate: -7.5% | |||||
| Serious | $25,000 | $7,500 | Low: $2,188 | Low: $1,094 | Low: N/A | Self-report: -15% | $5,250 - $25,000 | |
| Moderate: $4,375 | Moderate: $2,188 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $8,750 | High: $4,375 | High: $4,375 | Action to mitigate: -7.5% | |||||
|
A vessel that is 12 metres to less than 24 metres in length or A person other than an individual that owns or operates a vessel that is 12 metres to less than 24 metres in length Range: $1050 - $50000 |
Minor | $5,000 | $1,500 | Low: $438 | Low: $219 | Low: N/A | Self-report: -15% | $1,050 - $5,000 |
| Moderate: $875 | Moderate: $438 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $1,750 | High: $875 | High: $875 | Action to mitigate: -7.5% | |||||
| Medium | $25,000 | $7,500 | Low: $2,188 | Low: $1,094 | Low: N/A | Self-report: -15% | $5,250 - $25,000 | |
| Moderate: $4,375 | Moderate: $2,188 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $8,750 | High: $4,375 | High: $4,375 | Action to mitigate: -7.5% | |||||
| Serious | $50,000 | $15,000 | Low: $4,375 | Low: $2,188 | Low: N/A | Self-report: -15% | $10,500 - $50,000 | |
| Moderate: $8,750 | Moderate: $4,375 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $17,500 | High: $8,750 | High: $8,750 | Action to mitigate: -7.5% | |||||
|
A vessel that is 24 metres to less than 50 metres in length or A person other than an individual that owns or operates a vessel that is 24 metres to less than 50 metres in length Range: $2100 - $100000 |
Minor | $10,000 | $3,000 | Low: $875 | Low: $438 | Low: N/A | Self-report: -15% | $2,100 - $10,000 |
| Moderate: $1,750 | Moderate: $875 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $3,500 | High: $1,750 | High: $1,750 | Action to mitigate: -7.5% | |||||
| Medium | $50,000 | $15,000 | Low: $4,375 | Low: $2,188 | Low: N/A | Self-report: -15% | $10,500 - $50,000 | |
| Moderate: $8,750 | Moderate: $4,375 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $17,500 |
High: $8,750 |
High: $8,750 | Action to mitigate: -7.5% | |||||
| Serious | $100,000 | $30,000 | Low: $8,750 | Low: $4,375 | Low: N/A | Self-report: -15% | $21,000 - $100,000 | |
| Moderate: $17,500 | Moderate: $8,750 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $35,000 | High: $17,500 | High: $17,500 | Action to mitigate: -7.5% | |||||
|
A vessel that is 50 metres to less than 100 metres in length or A person other than an individual that owns or operates a vessel that is 50 metres to less than 100 metres in length Range: $2100 - $150000 |
Minor | $10,000 | $3,000 | Low: $875 | Low: $438 | Low: N/A | Self-report: -15% | $2,100 - $10,000 |
| Moderate: $1,750 | Moderate: $875 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $3,500 | High: $1,750 | High: $1,750 | Action to mitigate: -7.5% | |||||
| Medium | $75,000 | $22,500 | Low: $6,563 | Low: $3,281 | Low: N/A | Self-report: -15% | $15,750 - $75,000 | |
| Moderate: $13,125 | Moderate: $6,563 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $26,250 | High: $13,125 | High: $13,125 | Action to mitigate: -7.5% | |||||
| Serious | $150,000 | $45,000 | Low: $13,125 | Low: $6,563 | Low: N/A | Self-report: -15% | $31,500 - $150,000 | |
| Moderate: $26,250 | Moderate: $13,125 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $52,500 | High: $26,250 | High: $26,250 | Action to mitigate: -7.5% | |||||
|
A vessel that is 100 metres or greater in length or A person other than an individual that owns or operates a vessel that is 100 metres or greater in length Range: $2100 - $250000 |
Minor | $10,000 | $3,000 | Low: $875 | Low: $438 | Low: N/A | Self-report: -15% | $2,100 - $10,000 |
| Moderate: $1,750 | Moderate: $875 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $3,500 | High: $1,750 | High: $1,750 | Action to mitigate: -7.5% | |||||
| Medium | $100,000 | $30,000 | Low: $8,750 | Low: $4,375 | Low: N/A | Self-report: -15% | $21,000 - $100,000 | |
| Moderate: $17,500 | Moderate: $8,750 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $35,000 | High: $17,500 | High: $17,500 | Action to mitigate: -7.5% | |||||
| Serious | $250,000 | $75,000 | Low: $21,875 | Low: $10,938 | Low: N/A | Self-report: -15% | $52,500 - $250,000 | |
| Moderate: $43,750 | Moderate: $21,875 | Moderate: N/A | Cooperate: -7.5% | |||||
| High: $87,500 | High: $43,750 | High: $43,750 | Action to mitigate: -7.5% |